Planners, advisors, or counselors: who should you turn to?

Financial Planner vs. Financial Advisor vs. Financial Counselor

Have you ever been confused by where to turn when you need help with your finances? With over 183 different professional designations, (according to the Financial Industry Regulatory Authority (FINRA)), it wouldn’t be surprising if you were! The following definitions may help clear things up a bit.

1) Financial Advisor

Simply put, a financial advisor is anyone who advises you on your finances. Think of it as an umbrella term in the way that “medical professional” could be used to refer to a surgeon, a general practitioner, a nurse, or a psychiatrist.

A Financial Advisor may specialize in estate planning, insurance, investment/wealth management, debt repayment, tax planning, or many other areas of the financial industry. The important thing is that you are meeting with the right kind of financial advisor (medical professional) to meet your needs.

2) Financial Planner

A Financial Planner is like a general practitioner who works with you on your long-term health goals. They can refer you to other financial advisors when you need a specialty they don’t have.

A Financial Planner must complete coursework and pass rigorous testing to be able to advise individuals on how to reach long-term goals like planning and saving for retirement, obtaining life insurance (and other types of insurance), estate planning, and other long-term financial goals. Like Financial Advisors, they can specialize in one or several different areas.

It’s important to make sure any Financial Planner you meet with is a Certified Financial Planner; this means they have not only passed all coursework and testing, but they also have at least three years’ experience in the field and they have a fiduciary responsibility to you.

Someone who has a fiduciary responsibility is required by law to offer plans and products in the client’s best interest; not the option that makes the planner the most amount of money.

Fiduciary Responsibility

Financial Planners either make their money by charging a fee for service or through a commission selling you products, or a combination of both. Our friends at NerdWallet offer a good guide for finding a Financial Planner that fits your needs.

3) Financial Counselor

If a Financial Planner is a General Practitioner that you work with and build a relationship with for your overall, long-term health, a Financial Counselor is like a doctor at an Urgent Care center.

A Financial Counselor (also known as a Consumer Credit Counselor) will work with you on a short-term basis to reach an immediate financial need or goal:

• Paying off medical or collection debts
• Setting up a Debt Management Plan to pay off high interest credit cards
• Making a plan to improve your credit score
• Learning solid budgeting skills

At LSS Financial Counseling, we have Financial Counselors who specialize in Pre-Purchase Home-buying Counseling, Foreclosure Prevention, Reverse Mortgage Counseling, and Student Loan Repayment Counseling.

Unsure where to begin?

If you are still unsure who you should work with to reach your goals, it may make sense to start by determining which of your goals needs the most immediate attention.

If overspending or debt is holding you back from being able to invest more towards retirement or build emergency savings it makes sense to meet with a Financial Counselor to make a plan to pay off your debt and get your spending under control.

If your goal is to talk about retirement, investments, estate planning or making sure you have the proper amount of insurance in place the professional for you would be a Financial Planner.

If you just don’t know which is most important, make an appointment with an LSS Financial Counselor for a Financial Health Check-up and they can help you plan your next steps. Call 888.577.2227 to set up an appointment with a certified LSS Financial Counselor today!

Author Shannon Doyle is a certified LSS Financial Counselor.